Difference between revisions of "When a Creditor Wants to Take Money From Your Wages or Bank Account"

==Common questions about garnishment==

If you’re employed, the creditor can garnish your wages only after obtaining a court judgment against you. While a judgment in a lawsuit can be obtained after a trial, judgment can also be obtained by default if you, the debtor, don’t defend the lawsuit.  

But garnishment orders for child and spousal support do not need to be renewed each pay period. They last until you have paid all the support you owe. And if CRA issues a ''Requirement to Pay'' to your bank or your employer, it can last for up to 90 days without having to be re-issued.

The law generally restricts garnishing orders to only 30% of wages (up to 50% for child or spousal support, depending on the debtor’s income and the number of dependents). But that can still create serious financial hardship for you and your family. If it does, you can ask a registrar of the court that issues the garnishing order to reduce the percentage of your wages that can be garnished, or to release the funds held in court back to you, or to let you pay the judgment by installments. Ask the court registry where the order was issued for a hearing appointment with the registrar. This is called a ''payment hearing'' in small claims court and it may be before a judge.  

An employer cannot dismiss or demote an employee simply because the employer is given a garnishing order for the employee’s wages.

If an order has already been made against you, you must apply to the court to set it aside or change it. This is hard to do unless you can prove that you never got notice of the court proceeding that led to the order. If the order was granted recently, you might also be able to appeal it, but there are strict time limits to appeal. You should see a lawyer about how to change or set aside a judgment after its been granted.  

Tax debts can also be reviewed or appealed in some situations. You should see a lawyer in those cases.  

Never ignore a garnishing order if you’re the garnishee (for example, a debtor’s employer). Garnishment involves a court order—it’s important and has serious consequences. You must pay the court whatever you owe the debtor (your employee, in this example) at the time you get the order, up to the amount claimed in the order. Then you don’t have to pay that amount (what you paid to court) to the debtor. But if you ignore a garnishing order and pay the debtor instead, you may end up having to pay the money twice—to the debtor and then to the court.

It’s illegal to dismiss or demote an employee who is a debtor because you’ve received a garnishing order, and there may be harsh penalties if you do.

If you receive BC Income Assistance, the ''Employment and Assistance Act'' says it cannot be garnished. Similarly, Canada Pension Plan (CPP), Old Age Pension (OAP) and Guaranteed Income Support (GIS) payments (by cheque or direct deposit) cannot be garnished by '''non-government creditors'''. But most government benefits like Employment Insurance and CPP '''can''' be garnished to pay other government bodies such as CRA or FMEP. These government garnishments are not paid into court—they go directly to the government agency.  

A creditor must get a court order to get the money that has been paid into court under a garnishing order.  

The [https://www.fmep.gov.bc.ca/ FMEP] is a BC government program that enforces court orders and agreements for child and spousal support. It can also enforce court orders and agreements from other provinces. FMEP has special, wide-ranging powers to garnish bank accounts, tax returns, and wages of people who must pay support.